Illinois Department of Financial & Professional Regulation Illinois Department of Financial & Professional Regulation
 
Manuel Flores, Acting Secretary  
Pat Quinn, Governor
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Debt Settlement Consumer Protection Act

The Department enforces two acts that are designed to protect consumers who hire companies to assist them in settling, consolidating, or managing their debts.  The first of these acts is the Debt Management Service Act.  The second of these acts, which was signed by Governor Quinn and took effect on August 3, 2010, is the Debt Settlement Consumer Protection Act.


Key Components of the Debt Management Service Act are:
  • Regulates businesses who offer the planning and management of the financial affairs of a debtor for a fee and the receiving of money from the debtor for the purpose of distributing it to the debtor’s creditors.
  • Initial payment to creditors must occur within 30 days of after initial receipt; thereafter within 15 days.
  • Initial fee capped at $50.
  • Monthly fees capped at $50.
  • Provides for statutory examinations as needed.
 
If you are interested in applying for a license as a debt management company, click here.
 
Key Components of the Debt Settlement Consumer Protection Act are:
  • Regulates businesses that assist debtors for a fee where the primary purpose of the assistance is to obtain a settlement, adjustment or satisfaction of the consumer’s unsecured debt to a creditor.
  • Initial fee capped at $50.
  • Settlement fee limited to 15% of total savings obtained by the client.
  • Provides for statutory examinations as needed.
 
Questions & Complaints
Consumers requesting information or wishing to make a complaint about a company engage in debt management, Debt Settlement Consumer Protection Act, or debt consolidation can call the Department at 1-888/298-8089.
 
Rules & Regulations

As part of implementing the new Debt Settlement Consumer Protection Act, the Department must create rules to explain certain provisions and supply technical details not contained in the Act.  The proposed rules, which can be found here, must go through a public comment period, which will begin on August 20, 2010, during which the general public and other interested parties may submit comments on the rules.  Interested persons may submit written comments to:

                    Department of Financial and Professional Regulation
                    Attention:  Craig Cellini
                    320 West Washington, 3rd Floor
                    Springfield, IL  62786
                    217/785‑0813   FAX:  217/557-4451

The Department will only consider written comments received by October 4, 2010. After those comments are considered and any revisions are made, the rules are considered by the Joint Committee on Administrative Rules (JCAR), which is a legislative committee comprised of state senators and state representatives.  Information about JCAR can be found at: www.ilga.gov/commission/jcar/.  Because the proposed rules may change throughout this process, consumers and people in the industry should not rely on or take any action based on the language in the proposed rules.

The current rules under the Debt Management Service Act can be found here: Debt Management Rules

Proposed changes to the Debt Management Rules can be found here.

The complete filing of proposed rules in connection with debt settlement and debt management, as published in the Illinois Register on August 20, 2010, can be found here.

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